Luxury Insider: What Firm, For What Realtor, For What Client?

Right or wrong, I have been consistent all along my career in my belief that real estate agents can only be as good as the company they happen to be associated with. They cannot be better. I suspect that some agents would argue the point. They may be of the opinion that they are indeed better because they evolved in a positive way and, in the process, outgrew their firm that stagnated or retreated. To some extent, they may feel that their firm is keeping them from being as successful as they can be. Some agents honestly feel that way. OK, but if it is true that their company does not add value, in other words does not contribute to their success, what are they doing there? As independent contractors, they are certainly free to do whatever they feel which conforms better to their professional needs and ambition, including relocating their license.

Having said that, I must admit that the on-going trend in the real estate business has challenged my thinking on the matter. It is a fact that real estate companies, as such, spend less & less promoting the associates or their listings, while the ambitious agents who want to move to the next level, have to spend more & more to fill the hole. They advertise their listings in the community and market themselves to prospective buyers & sellers in the process. Obviously companies benefit greatly from the branded ads paid for by their own associates.

We know why most companies and offices are reluctant to spend marketing money to advertise their inventory of homes for sale: they don’t have it, or not enough of it in the highly competitive context of reduced fees and larger commission splits. We also know why most agents are just as reluctant to spend their own money: they don’t have it (after 5/6 years of crisis) or they feel they don’t have to in today’s market when listings don’t stay too long on the shelves.

So, considering the above arguments about who - between the company and the agents, is driving the business these days, let’s get back to the original question: can agents be better than their firm? Well, what are agents expecting from their company anyway? Depends. It takes all kinds to make the real estate carousel turn. Some firms offer full service; some little service; some no service. Your pick as an agent.

Typically, the less service(s), the higher the split, all the way up to 100%, minus a bunch of fees, which almost equates to renting space. There are many fans of this business model which has been proliferating all over the map and under so many different company logos over the last 20 years or so.

Agents who like the model –and there are excellent ones- are generally independent and entrepreneurial. They like to do business their own way. Good idea. So far so good. I don’t have a problem with that. I have a question though: can what an agent perceives to be good for him/her be also good for the client?

That question, in my view, is the centerpiece of the whole interrogation about which firms are best suited to deliver on both agents & principals expectations. These expectations NEED to be compatible. Did you notice the capital letters? A good agent does not win –or should not win- if the client loses.

From my point of observation, there are three main areas where the clients’ needs are well served thanks to the company services eventually provided to the agents. Those 3 areas can only be found in large full service brokerages:

  • Multi-disciplinary expertise: An agent, no matter how good & how knowledgeable, cannot do everything, or better not, for his sake and that of his client. The company offers the resources, the services, the tools, the financial backing. That goes for education, marketing, legal, reporting, networking, relocation, etc.
  • Management at the office level: I am talking here about true management, meaning full-time and non-competing. Agents need a mentor/manager, someone they can trust. Someone who can support them, inspire them, guide them, and who is devoted to making them grow. A leader always willing to help and who actually can help. That, you can bet, will help the clients as well.
  • High-end marketing: If there is an agent out-there who thinks that he/she can market a luxury property alone in the global market where most of the buyers come from afar, that agent is a fool. It takes a special firm, with a special division, with a special estates program & with an international network to market homes in a meaningful way at that price level. Also, it takes a will & even guts. A few firms in the US, theoretically, could pretend having the means of doing it, except that only a handful at best are actually orchestrating the strategy & paying for its implementation. Most others depend on agents to do & pay whatever they want & can.

 

Back to square one: can agents be better than their firm? No. Not if the client’s interest comes first.